Does this allow to still be able to transfer files from the Mac and PC using the NTFS partition? I've never had luck with externals working both Mac AND PC, so I'm a bit nervous about reformatting it right away.

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Sadly there is no one common format that works well for both Time Machine and any flavor of Windows.

Unless you are interested in buying filesystem support software to make Windows on a PC work with HFS+ or make OS X on a Mac work with NTFS, the best solution is to partition the drive into two sections.

I would select the GPT volume format (GUID Partition Table) and then make one part of the drive HFS+ for Time Machine and Mac only files. The other partition should be FAT/ExFAT so both the Mac and PC can read/write all files on that drive.

Or you could just keep the entire drive HFS+ and turn on file sharing. The Mac will re-share the entire drive over SMB so the PC can read/write to files on the drive indirectly, but without needing to be exposed directly to the file system implementation details. This of course is a poor solution if you really want only one computer attached to the drive and need to shuttle the files or the systems are otherwise incapable of being networked and/or having the Mac run all the time when the PC needs to access files.